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UK child poverty targets are 'impossible' to reach UK child poverty targets are 'impossible' to reach
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A new report published today shows that the UK will not meet both of its child poverty targets in 2020 – even in the most optimistic of scenarios.A new report published today shows that the UK will not meet both of its child poverty targets in 2020 – even in the most optimistic of scenarios.
The report by the Social Mobility and Child Poverty Commission was created to look at the impact of household employment on child poverty rates, and it found that “even with a parental employment rate of 100 percent for men and women with children, it is impossible to meet the absolute or relative poverty targets”. The report by the Social Mobility and Child Poverty Commission was created to look at the impact of household employment on child poverty rates, and it found that “even with a parental employment rate of 100 percent for men and women with children, it is impossible to meet the absolute or relative poverty targets”.
To reach the 2020 targets, the government would need to reduce the proportion of children living in households below 60% median income to a rate of less than 10% (relative child poverty), and reduce the proportion of children living in households below what 60% of median income was in 2010-11 (uprated for inflation), to just 5%.To reach the 2020 targets, the government would need to reduce the proportion of children living in households below 60% median income to a rate of less than 10% (relative child poverty), and reduce the proportion of children living in households below what 60% of median income was in 2010-11 (uprated for inflation), to just 5%.
There are three main employment scenarios investigated in the report:There are three main employment scenarios investigated in the report:
Similarly, there are also three main earnings scenarios looked at in the report:Similarly, there are also three main earnings scenarios looked at in the report:
Yet this table illustrates that if wages and employment rise in accordance with OBR projections, there will still be 21% of children in relative child poverty. Even with optimistic projections, the child relative poverty rate will still be double what the relative child poverty target is.Yet this table illustrates that if wages and employment rise in accordance with OBR projections, there will still be 21% of children in relative child poverty. Even with optimistic projections, the child relative poverty rate will still be double what the relative child poverty target is.
What’s interesting about the above table is that it shows that the best outcome - the one that reduces relative child poverty the most - is higher employment but lower wages.This may seem surprising, but higher wages overall mean that the median income will change and be harder to attain, ensuring that more children will effectively be in ‘relative’ poverty.What’s interesting about the above table is that it shows that the best outcome - the one that reduces relative child poverty the most - is higher employment but lower wages.This may seem surprising, but higher wages overall mean that the median income will change and be harder to attain, ensuring that more children will effectively be in ‘relative’ poverty.
Even increasing working hours will not help meet the target relative child poverty rates, as shown in the table below.Even increasing working hours will not help meet the target relative child poverty rates, as shown in the table below.
With optimistic wage growth and 20 hours of extra work a week, just over 5% of children will be lifted out of relative poverty. This would not be enough to take the number of those in poverty currently, down to the target of less than 10%.With optimistic wage growth and 20 hours of extra work a week, just over 5% of children will be lifted out of relative poverty. This would not be enough to take the number of those in poverty currently, down to the target of less than 10%.
However, in real terms, an increase of just five hours a week when wage growth follows OBR projections, could move 205,000 children above the relative poverty line, and with 20 extra hours a week that figure could increase dramatically to 660,000 children.However, in real terms, an increase of just five hours a week when wage growth follows OBR projections, could move 205,000 children above the relative poverty line, and with 20 extra hours a week that figure could increase dramatically to 660,000 children.
When it comes to the absolute child poverty target though, as you would expect, optimistic growth and optimistic employment rates combined help to reduce child poverty, lowering it to 21.2%. Yet this is still a way off from the target of 5%.When it comes to the absolute child poverty target though, as you would expect, optimistic growth and optimistic employment rates combined help to reduce child poverty, lowering it to 21.2%. Yet this is still a way off from the target of 5%.
The report also looked at the impact of in-work Universal Credit, and although that lowered the child poverty rates somewhat (for relative poverty, it was reduced by 0.8 percentage points; for absolute poverty it was reduced by one percentage point) it did not have a large impact.The report also looked at the impact of in-work Universal Credit, and although that lowered the child poverty rates somewhat (for relative poverty, it was reduced by 0.8 percentage points; for absolute poverty it was reduced by one percentage point) it did not have a large impact.
For these reasons, the report concludes: “while different assumptions on employment and wage growth make a considerable difference to the projected rate of child poverty in 2020, it is not possible to meet the child poverty target through any of the main scenarios considered”, while also noting that the scenarios were extremely optimistic. For these reasons, the report concludes: “while different assumptions on employment and wage growth make a considerable difference to the projected rate of child poverty in 2020, it is not possible to meet the child poverty target through any of the main scenarios considered”, while also noting that the scenarios were extremely optimistic.
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